(NewsNation) — The capture of ousted Venezuelan President Nicolás Maduro by United States forces is shining a bright spotlight on so-called “prediction markets.”
These online platforms allow users to place wagers on real-world outcomes — from sports to elections and award shows.
In this case, a mysterious bettor won nearly half a million dollars after placing a series of relatively modest bets predicting that U.S. forces would intervene in Venezuela.
The final wager was placed just hours before the operation that led to Maduro’s arrest, raising questions about whether the bettor had access to inside information.
How do prediction markets operate?
So how do these markets work — and how are they allowed to operate nationwide?
Prediction market platforms argue they are not gambling operations. Instead, they describe themselves as financial markets, which allows them to operate nationwide, including in states where gambling is illegal.
The biggest players are Polymarket and Kalshi. Users trade contracts with one another rather than betting against a house, and the platforms profit by charging small transaction fees. During the 2024 election, billions of dollars were wagered on these sites, and in some cases, prediction markets outperformed traditional polling.
Insiders say the space could become a trillion-dollar industry. Polymarket and Kalshi have already attracted deals with major media companies and sports leagues, including Google, CNN, CNBC, Dow Jones, the UFC, and the NHL.
Polymarket drew attention this week after a new user turned about $30,000 into more than $400,000 by betting Maduro would be removed from power, with large bets placed shortly before his capture. That timing raised questions about insider knowledge.
Billions wagered on prediction markets
Dustin Gouker, a gambling and prediction markets writer, says regulation simply hasn’t kept pace with the industry’s growth.
“They’re growing really quickly,” he said. “They’re not really regulated in a way that sports books are or other forms of gambling. Right now, we’ve seen the CFTC kind of have this laissez-faire attitude, and they’re just kind of letting things happen.”
Polymarket is also facing backlash over a controversial bet asking whether the U.S. would “invade” Venezuela. The platform ruled Maduro’s capture qualified as a “snatch-and-extract,” not an invasion, and declined to pay out, upsetting users.
An attorney who spoke with NewsNation says any chance of recovering losses likely hinges on the platform’s fine print and arbitration clauses.
Congress looks at prediction market reform
There is some movement in Congress to step in.
New York Democratic Congressman Ritchie Torres has introduced legislation that would bar federal officials from trading on prediction markets using nonpublic information.
Torres says the concern is straightforward: unlike stock markets, these platforms lack comparable safeguards, creating opportunities for abuse. Still, the bill faces long odds of advancing.
And there’s another wrinkle — ties between these platforms and the Trump administration.
President Donald Trump’s nominee to lead the Commodity Futures Trading Commission sits on Kalshi’s board and owns company stock. Kalshi also lists Donald Trump Jr. as a strategic adviser.